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NEWS & CURRENT AFFAIRS

The Nairobian

Varsities, counties owe over Sh600m Sacco money

Rift Valley

By Antony Gitonga | Nov 21, 2024

Cooperatives and MSMEs Cabinet Secretary Wycliffe Oparanya during the launch of the New Kenya Planters Co-operative Union Strategic Plan 2023-2027 at Utalii Hotel grounds, Nairobi, on November 13, 2024. [Kanyiri Wahito, Standard]

Universities and county governments owe their workers more than Sh600 million in unremitted Sacco deductions, according to the Ministry of Co-operatives and MSMEs.

This situation has impoverished members, resulting in millions of shillings in lost savings, with Moi University being the latest casualty.

Co-operatives Cabinet Secretary Wycliffe Oparanya revealed that universities are the largest offenders in failing to remit millions owed to their Saccos.

“The Ministry is collaborating with the Treasury to release funds owed by counties to Saccos as part of the solution to this challenge,” Oparanya said.

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Speaking during a consultative meeting in Naivasha, Oparanya noted that the collapse of Moi University Sacco was under review, with the Ministry awaiting a report to determine if it can be salvaged.

The CS also raised concerns about mounting debts, particularly in the agricultural sector, calling ongoing government waivers unsustainable.

Oparanya said that debts owed to the coffee sector had risen from Sh6 billion to Sh9 billions within two years as management borrowed funds to pay dividends.

“The government has set up an audit committee to tame unwarranted loan applications by management of cooperatives, which will help address rising debts,” said Oparanya.

He at the same time said that the Ministry was coming up with a policy to regulate dividends paid by Saccos as some were borrowing to please their members.

The CS said that 75 per cent of challenges facing the sector would be resolved once the Co-operative Act was enacted into law by early next year.

On his part, Cooperatives PS Patrick Kilemi said the growth in the sector has seen over 15 million Kenyans join cooperatives mostly in the agriculture sector, and over four million in the financial sector.